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Annual Report 2016

Report of the Trustees and Financial Statements 2016

2 Shell Foundation Annual Report 2016

Contents

AT A GLANCE

About Shell Foundation 03

Trustees, Directors, Officers and Advisors 04

Our Focus 06

Six Step Theory of Change 06

Shell Foundation Impact 07

Shell Foundation Programmes 08

Access to Energy 09

Sustainable Mobility 16

SME Growth 21

Incubator 22

REPORT OF THE TRUSTEES

Report of the Trustees for the year ended 2016 24

Independent Auditor’s report to the member of the Shell Foundation 29

FINANCIAL STATEMENTS 2016

Consolidated statement of financial activities for the year ended 31 December 2016 31

Consolidated statement of financial activities for the year ended 31 December 2015 (restated) 32

Consolidated income and expenditure account for the year ended 31 December 2016 33

Consolidated and charity balance sheets as at 31 December 2016 34

Cash flow statement and consolidated cash flow statement for the year ended 31 December 2016 35

Notes to the financial statements for the year ended 31 December 2016 36

Our Focus

06

24

31

Report of the Trustees

Financial Statements 2016

Shell Foundation Annual Report 20163

Shell Foundation (SF) is an independent charity, established in 2000 by the Shell Group. SF works to create and scale new solutions to global development challenges by applying business thinking to major social and environmental issues linked to energy and mobility.

Learning from both success and failure it has gradually developed a new ‘enterprise-based’ model to catalyse lasting social and environmental impact on a global scale. This sees it deploy a blend of financial and non-financial resources to accelerate transformative innovation and harness private markets to deliver public benefit at scale.

Our ApproachSF works with a small number of entrepreneurial partners to identify the underlying market failures behind intractable problems and co-create new social enterprises to solve them. SF provides patient grant funding, extensive business support and access to networks to help pioneers to validate new models, achieve financial independence and expand across geographies.

SF then creates specialist intermediaries to facilitate growth and replication at an industry level. By working in this way it now has several strategic partners – addressing issues as diverse as energy access, sustainable mobility and job creation through the SME sector – that are delivering large-scale impact in multiple countries across Africa, Asia and Latin America.

www.shellfoundation.org

About Shell Foundation


Trustees, Directors, Officers and Advisors

Trustees, Directors, Officers and Advisors

Trustees (who are also Directors)The Trustees of the Foundation who were in office during the year and up to the date of signing the financial statements were:

Mr Malcolm Brinded, CBE Nominated TrusteeMr Ben van Beurden Resigned 7 July 2016Lord Mark Malloch-Brown Nominated Trustee Resigned 24 November 2016Mr Maxime Verhagen Nominated Trustee Professor Margaret Kigozi Nominated Trustee Mr Andrew Brown Mr Maarten Wetselaar Appointed 5 August 2016Ms Sinead Lynch Appointed 11 January 2017 Principal Officers Mr Sam Parker Director Shell Corporate Secretary Ltd Secretary Ms Rachel Singh Davies Chief Financial Officer To 31 January 2016, then

from 2 March 2017 Mr Paul Suller Chief Financial Officer From 1 February 2016 to

1 March 2017

Registered Office Shell Centre York Road, London SE1 7NA

Independent External Auditor Audit and Risk Committee Members Ernst & Young LLP Mr Malcolm Brinded, CBE Ten George Street Ms Sinead Lynch Edinburgh Mr Stuart Chaplin EH2 2DZ Mr Alan Davies Bankers Lloyds Bank plc 25 Gresham Street London EC2V 7HN

Investment Manager Independent Investment Advisor Investment Committee Members

Shell Asset Management Company Cambridge Associates Mr Malcolm Brinded, CBEWinston Churchill Tower 80 Victoria Street Ms Sinead LynchSir Winston Churchillaan 366H Cardinal Place Mr Stuart Chaplin2285 SJ Rijswijk London SW1E 5JL Mr Alan DaviesThe Netherlands United Kingdom


OPERATIONALBREAK-EVEN

FINANCIALSUSTAINABILITY MARKET

IMPACT

PIONEERIMPACT

Our FocusSF is an independent charity that applies a business approach to global development challenges that constrain job creation, access to energy and urban mobility.

Since 2000, SF has worked with social enterprise partners to create new business solutions to deliver social and environmental impact on a global scale. SF provides a mix of business support, grant funding and market links to help entrepreneurs prove their business

models, achieve financial independence and expand into new markets. To support the growth and replication of these solutions, SF also creates specialist organisations to address market bottlenecks, such as supply chain intermediaries and financial vehicles.

To date, SF has deployed $290 million of grant funding into social enterprises and new market builders operating in Africa, Asia and Latin America.

Six Step Theory of Change


SHELL FOUNDATION IMPACT

Performance Analysis

In line with SF’s ‘enterprise-based’ approach, it focuses on measuring its own performance and its partners’ progress towards sustainability and large-scale impact. Since 2010, SF has used four aggregate metrics to measure its overall developmental impact, with the intention to facilitate knowledge and learning rather than to use the KPIs as goals in themselves. Tracking and measuring changes in performance against pre-defined milestones and impact targets allows SF to better allocate resources to deliver greater development outcomes.

Partner Performance

From the outset SF supports partners to define a few key metrics specific to their own enterprise. Wherever possible, SF draws upon independent monitoring and evaluation to validate reported data. SF’s partners track and measure a wide variety of development outcomes including:

■ low-income customers served, e.g. through product sales or bus ridership;

■ environmental benefit, e.g. reductions in emissions or water usage;

■ economic benefit, e.g. jobs created, earnings increased, money saved;

■ social benefit, e.g. improved health or time saving.

SF’s partners also track progress to financial sustainability through monthly and quarterly financial reporting as well as performance ratios (such as subsidy per product sold). Regularly tracking performance against projected targets helps SF to better understand the overall business, respond quickly to unexpected challenges and improve the effectiveness and efficiency of its support over time.

35,135

55,165

Jobs Created2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

28,769

21,399

10,496

13,158

8,244

79,000

110,000

66,267

Carbon Reductions (million tonnes)

6.59

10.33

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

4.69

3.39

1.10

1.94

0.195

20

28

14.24

Livelihoods Improved (millions)

23.80

47.82

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

17.81

9.14

2.49

4.79

2.28

103

143

70.02

Leverage ($ billions)

4.95

5.45

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

3.91

3.25

1.06

1.34

0.37

6.1

6.4

5.75

sustainable jobs created66,267

tonnes of CO2 avoided14.24million

livelihoods improved70.02million

dollars leveraged5.75billion

$

Shell Foundation Programmes

ACCESS TO ENERGY


At a Glance: Strategic Report – Achievements and Performance

ACCESS TO ENERGY

Energy is the bedrock of inclusive economic growth. Nearly two billion people lack access to reliable and affordable modern energy – severely constraining their health, education and earning potential.

Of this group, 60% live entirely without electricity for cooking, lighting and heating at home, for community services, or for improving the productivity of small businesses and farms.

This programme aims to build a viable market for affordable off-grid energy solutions. SF co-creates and supports the scale-up of pioneering social enterprises and market enablers (such as supply chain or financial intermediaries) to increase the availability of modern energy services to low-income consumers in ways that are financially viable and scaleable. SF’s geographic focus is India, Africa and Latin America. In addition, the programme aims to create significant reductions in carbon emissions.

2billionpeople lack access to reliable and affordable modern energy

39millionlivelihoods impacted by d.light

3,200biogas units installed by Sistema Biobolsa

5milliontonnes of CO2 reduced by the use of Envirofit cookstoves

$3.2million

cumulatively improved earnings by SunCulture customers through solar irrigation

$22.6millionadditional investment secured to scale-up Husk and Redavia



ACCESS TO ENERGY

Household Energy

Around 1.2 billion people are without access to the power grid and currently spend about $27 billion annually on fuel-based lighting and mobile-phone charging technologies.

SF aims to improve access of affordable, reliable and modern energy products for low-income households. In 2016, SF focused on scaling its portfolio of modern energy product manufacturers and improving the affordability of these products.

In addition to working with start-up enterprises, SF also supports innovation within more established energy enterprises to help them deepen their impact on low-income households and expand into frontier markets.

2016 key highlights: ■ Helped d.light and Greenlight Planet (solar lighting and energy businesses) launch pay-as-you-go business models with low-mobile money penetration in three markets – Ethiopia, Sierra Leone and Nigeria.

■ Worked closely with d.light’s management team to develop and execute a fundraising strategy. d.light successfully secured $30 million.

■ Co-designed a new product development model with M-KOPA Solar (a pay-as-you-go energy business) to deepen its impact with a wider range of customers. For example, the business has enabled 30,000 customers to purchase solar-powered TVs on a pay-as-you-go basis.

■ Leveraged 10 weeks of pro-bono support from five MBA students to help Envirofit (a clean cookstove manufacturer) assess the market opportunity for LPG cookstoves as a cleaner cooking technology.

Future plans

SF will continue to engage with investors to attract commercial capital into scaling household energy businesses in established and frontier markets. It will also be supporting the development of new low-cost energy-efficient appliances and innovative models for last-mile distribution and consumer finance.

39millionlivelihoods impacted by d.light

5milliontonnes of CO2 reduced by the use of Envirofit cookstoves

400,000solar home systems purchased on pay-as-you-go basis from M-KOPA Solar



ACCESS TO ENERGY

Off-grid utilities

SF is co-creating off-grid utility models that can provide reliable and affordable modern energy beyond basic lighting and mobile phone charging. It aims to support pioneering models that offer an energy service that meets the entire energy needs of off-grid households, businesses and community services.

2016 key highlights ■ Supported Redavia Solar (a modular solar farm solution for remote businesses) to develop and pilot its first off-grid community model in Tanzania.

■ Directed and managed a strategic rebrand of Husk (a 24/7 off-grid energy utility using solar energy and biomass) to support the relaunch of its business with investors and customers.

■ Worked closely with the CEOs of Redavia and Husk to build organisational capacity for scale-up. This included supporting the organisations with recruiting their senior management teams.

Future plans

SF will focus on testing the commercial viability for off-grid utility businesses in different markets and share learnings to build investors in these models.

$22.6millionadditional investment secured to scale-up Husk and Redavia

75mini-grid sites owned and operated by Husk across India and Tanzania

Up to

40% energy costs saved by Redavia customers



ACCESS TO ENERGY

Energy for agriculture

SF is seeking to test new technologies and develop business models tailored to meet the unique energy needs of smallholder farmers and improve their livelihoods. It is focused on improving access to energy across the agricultural value chain – food production, agro-processing, post-harvest and storage facilities.

2016 key highlights ■ Provided extensive hands-on support to develop the business strategy of start-ups Village Industrial Power (converts crop waste into thermal, mechanical and electrical energy) and Sistema Biobolsa (provides low-cost waste-to-biogas systems).

■ Leveraged pro-bono support from Shell staff that informed the strategies of Village Industrial Power and Sistema Biobolsa for local manufacturing, fuel technology and engineering and design.

■ Partnered with SunCulture (a solar-powered irrigation business) and Rent to Own (a productive asset financier) to test new financing models for smallholder farmers.

Future plans

SF will continue to incubate and scale-up early stage technology companies that design, manufacture and distribute renewable energy agricultural assets for smallholder farmers. It also plans to find innovative ways to link farmers to markets and improve access to quality inputs and data.

475millionsmallholder farmers in the world

$3.2millioncumulatively improved earnings by SunCulture customers through solar irrigation

72%Rent-to-Own low-income customers earning less than $2.50 per day

3,200biogas units installed by Sistema Biobolsa



ACCESS TO ENERGY

Access to finance

Access to finance is a major barrier of growth for energy businesses serving low-income consumers in emerging markets. Building on SF’s experience of supporting these businesses, SF is creating and scaling innovative financing mechanisms that support growth of enterprises from pilot to growth stage.

2016 key highlights ■ Supported Aavishkaar Intellecap Group (a specialist financial services and advisory group) to restructure their business and helped it fundraise $25 million to expand globally. The organisation provides a range of financial solutions to support high-impact enterprises to scale in sectors such as energy, education, health, financial inclusion and sanitation.

■ Provided Factor(E) Ventures (an early-stage technology impact investor) with advisory support as part of their Investment Committee and helped secure investment from Tata Trust and Autodesk Foundation.

■ Supported the CEO of Lendable (a financial data marketplace for receivables financing) to create legally compliant systems, products and processes to launch and serve pay-as-you-go energy companies.

Lendable aims to deploy

$100million debt financing by 2018

Aavishkaar aims to deploy

$50-70million over the next 5 years

RESOURCES EXPENDED

2016 2015

$000 $000

Grants 21,430 8,215

Direct costs 1,156 1,292

Support costs 814 1,378

TOTAL 23,400 10,885



ACCESS TO ENERGY: CASE STUDY

d.light designs and manufactures high-quality affordable solar energy products and creates innovative distribution partnerships to reach low-income consumers and businesses.

Its solar products provide high-quality light, long-term cost savings and immediate health benefits to households, farms and small businesses.

d.light’s products range from portable lanterns retailed at $5, to larger home systems that power several lights, radios and mobile phones. This allows customers to start small, see value and have the flexibility to pick and choose from a variety of products to suit their unique needs and budget.

Find out more

39millionlivelihoods improved

2.5milliontonnes of carbon reduced – a saving equivalent to taking 4.4 million cars off the road for a year

$42.5milliontotal leveraged investment


SUSTAINABLE MOBILITY




At the heart of any thriving and prosperous society is the ability to move efficiently, access services and transport goods between locations.

Yet today, in major cities in emerging markets, low-income neighbourhoods lack access to public transport and central districts are brought to a halt by traffic gridlock. 70% of CO2 emissions come from cities and 85% of the world’s traffic fatalities occur in low- and middle-income countries. Heavy congestion and pollution is considered a normal part of daily life, disproportionately impacting the urban poor.

This programme focuses on co-creating, supporting and scaling enterprises and institutions with innovative approaches to provide safer, cleaner and more affordable transport for low-income urban and rural communities.

5.4milliontonnes of CO2 savings enabled by WRI-EMBARQ

4.5millionsafer trips made in Kampala, Uganda through SafeBoda services

3,893leases provided by Tugende to customers considered ‘high credit risk’. 90% repayment rate achieved

85%of the world’s traffic fatalities occur in low and middle-income countries

8.3million passengers served on sustainable transport solutions across 68 cities by WRI-EMBARQ




Enterprises

SF provides support to unproven mobility businesses with scaleable solutions that can increase access to affordable, clean transport in cities, improve the delivery of urban and rural transport services, and reduce emissions intensity through technology innovation.

2016 key highlights ■ Connected SafeBoda (a mobile-enabled network of safer motorcycle taxis) and Tugende (an asset finance provider for motorcycle taxis) with capacity-building support from the UN Global Road Safety Partnership.

■ Helped SafeBoda design and test revenue models that incentivised safer driving practices across its network of 1,100 drivers.

■ Supported Tugende to create an expansion plan in Uganda across further cities and rural areas.

Future plans

SF plans to expand its partnerships with SafeBoda and Tugende in 2017 to support the businesses’ journeys to sustainability. It will also continue to identify and support the scale-up of disruptive transport business models that better serve low-income consumers in Africa and India.

3,893leases provided by Tugende to customers considered ‘high credit risk’. 90% repayment rate achieved

4.5millionsafer trips made in Kampala, Uganda through SafeBoda services




Institutions

SF co-creates global institutions to tackle pollution and congestion in fast-growing cities. These organisations play a catalytic role in working with the private and public sector to implement effective sustainable mobility solutions.

2016 key highlights ■ Helped Smart Freight Centre (SFC) – a global freight association working to reduce freight emissions – to build operational capacity in its China office. As a result SFC was able to build a partnership with China’s largest freight forwarder and will be helping employ fuel-efficient technology across its fleet.

■ Provided strategic guidance during the development of SFC’s ‘Smart Trucks Platform’ – a single hub for comparing freight technology solutions and promoting the most successful.

■ Supported WRI-EMBARQ (a global mobility network helping cities implement sustainable solutions) to develop a strategy to support private sector mobility providers. In 2016, two pilots were successfully launched in Ethiopia and Ghana.

■ Provided governance support to WRI-EMBARQ’s new mobility ‘accelerator’. SF assessed entries and helped identify 11 of the most promising mobility start-ups for WRI-EMBARQ’s business incubators in Mexico and India.

Future plans

SF will continue to support WRI-EMBARQ and SFC to deepen its impact and expand into more cities. SF aims to consolidate and share its combined experience and learnings to generate more awareness on the issues it is addressing and help attract more funding into private/public sector mobility initiatives.

RESOURCES EXPENDED

2016 2015

$000 $000

Grants 4,225 2,452

Direct costs 779 254

Support costs 719 452

TOTAL 5,723 3,158

10,000trucks to be assessed using Smart Trucks Platform in 2017

8.3millionpassengers served on sustainable transport solutions across 68 cities by WRI-EMBARQ

5.4milliontonnes of CO2 savings enabled by WRI-EMBARQ



SUSTAINABLE MOBILITY: CASE STUDY

SafeBoda operates a network of trained motorcycle taxi (‘boda’) drivers in Kampala, Uganda. Customers can access transport on demand using their mobile phone to book and pay for a driver through the company’s mobile app or call centre.

To be part of the network, drivers must undergo an interview process, complete SafeBoda’s road safety training course, learn basic first aid and wear a helmet that is provided. This helps maintain a high quality of committed drivers.

For drivers, the prospect of generating more income from accessing more customers and spending less time idle is a very attractive value proposition. As a result, many are willing to pay a membership fee and a percentage of the value of the journey.

With SF’s support, SafeBoda aims to expand throughout East Africa.

Find out more

20,000Safe trips per day in Kampala

Drivers completed

50% more trips per day in 2016

Women are

30% more likely to take a SafeBoda than an unregulated one

Network expanded from 100 to more than

1,100 drivers in 12 months


SME GROWTH



SME GROWTH

Small- and medium-sized enterprises (SMEs) in developing countries struggle to obtain finance from local banks as they lack the collateral, track record or skills. Yet the SME sector is absolutely vital to economic development.

This programme focuses on supporting under-served SMEs in developing countries to drive job creation and economic growth. SF has a long-term strategic partnership with GroFin – a specialist financier and developer that assists start-up and early stage growth SMEs through the integrated provision of business development assistance and appropriate finance. Together, SF and GroFin are promoting a new asset class called ‘Growth Finance’ as a self-financing driver of inclusive growth.

2016 key highlights ■ Provided GroFin with strategic input on its business strategy, including supporting the establishment of a new GroFin branch in Ivory Coast. Active member of the Advisory Board on all GroFin funds.

■ Co-designed a research initiative with the Aspen Network of Development Entrepreneurs and advisory firm Enclude, to better understand barriers to scaling SME funds and explore innovations that could help catalyse more investment into the sector.

■ Helped GroFin strengthen key relationships with its investors such as German government-owned development bank KFW and the UK government’s Department for International Development (DFID), and explored how they could further support GroFin’s work in Africa and MENA (Middle East and North Africa).

Future plans

SF will continue to provide governance and capacity-building support to maintain GroFin’s growth, demonstrate a globally scaleable model for SME growth and spur investment into SME funds. SF also plans to catalyse and support market-building initiatives that will work towards tripling current funding into SMEs in emerging markets by 2020.

RESOURCES EXPENDED

2016 2015

$000 $000

Grants (2,140) -

Direct costs 4,218 156


TOTAL 2,547 191

21,000direct jobs created and sustained by SMEs supported by GroFin

GroFin’s business support and investment model has seen an

81% success rate compared to traditional viability rates of 10-30% for SMEs

GroFin aims to invest

$660million to create and sustain 237,000 jobs across Africa and the MENA region by 2025


INCUBATOR



INCUBATOR

This programme aims to test a diverse range of innovative models to identify which, if any, offer the potential to be both sustainable and scaleable solutions that will increase access to energy and improve sustainable mobility in emerging countries.

SF’s incubation strategy takes two main approaches: incubating new business models and technologies which can impact at least 10 million people and be globally scaleable, and building new market enablers that can support growth.

Financial innovation

SF is co-creating and testing a range of new financial models and tools with the potential to unlock a range of funding for enterprises serving low-income populations.

■ Helped co-create a business accelerator focused on pay-as-you-go solar companies operating in frontier markets like Mozambique and Sierra Leone. This will help accelerate access to energy outside of East Africa.

■ Supported Future-Fit to start piloting a universal framework to validate and compare the contribution of different social enterprises towards the UN Sustainable Development Goals.

Human capital

A major bottleneck to an enterprise’s growth is attracting talent. This is even harder for businesses in emerging markets serving low-income populations. SF is working with dedicated talent intermediaries to scale new models that aim to make finding talent easier and help build the right capacity within organisations.

■ Provided strategic business support to inform the business model design of Shortlist (an HR service provider) and Anthropower (a technical skills-building course provider) to better meet the needs of energy enterprises in India.

Market development

SF is developing a range of market-building interventions to help create an enabling environment in which energy and mobility enterprises can thrive. These interventions include creating new institutions and bodies equipped to tackle market barriers and facilitate the expansion and widespread replication of proven business models to deliver more impact.

■ Co-designed two new market institutions with Energy Private Developers (Rwanda) and Open Capital Advisors (Uganda). These organisations are dedicated to directing public and private support towards tackling market barriers faced by energy businesses to help them scale-up quicker.

Improved transport

SF is working with a range of early-stage mobility businesses to improve the movement of people and goods in urban and rural contexts. It is testing alternative solutions that aim to bring affordable, safer and cleaner transport and impact low-income populations.

■ Provided technical and business support to Globology (an East African ferry transport company) to deliver safer and affordable rural water transportation for island communities on Lake Victoria.

■ Co-created tech-enabled commuter transport models with Bussi (Mexico) and Commute (India) that are leveraging and strengthening informal transport systems to reduce congestion and pollution in cities.

Future plans

SF will use the learnings from these pilots to inform its access to energy and sustainable mobility strategies. SF will maintain support for current pilot partners, identify innovative businesses and develop long-term partnerships to scale a handful of new solutions.

RESOURCES EXPENDED

2016 2015

$000 $000

Grants 1,846 3,268

Direct costs 278 418


TOTAL 2,429 4,212

REPORT OF THE TRUSTEES

Report of the Trustees for the year ended 2016 25

Independent Auditor’s report to the member of Shell Foundation 29

FINANCIAL STATEMENTS 2016

Consolidated statement of financial activities for the year ended 31 December 2016 31

Consolidated statement of financial activities for the year ended 31 December 2015 (restated) 32

Consolidated income and expenditure account for the year ended 31 December 2016 33

Consolidated and charity balance sheets as at 31 December 2016 34

Cash flow statement and consolidated cash flow statement for the year ended 31 December 2016 35

Notes to the financial statements for the year ended 31 December 2016 36

Report of the Trustees and Financial Statements 2016


Report of the Trustees for the year ended 2016

The Trustees, who are also directors of the Foundation for the purpose of the Companies Act, present their annual report and the audited consolidated financial statements for the year ended 31 December 2016.

The information with respect to trustees, directors, officers and advisors set out on page 4 forms part of this report as does the report on Achievement and Performance on pages 9 to 23. The financial statements comply with current statutory requirements, the Memorandum and Articles of Association, applicable Accounting Standards in the United Kingdom, the Statement of Recommended Practice ‘Charities SORP (FRS 102)’ effective 1 January 2015, the Companies Act 2006 and the Charities Act 2011.

STATUS AND ADMINISTRATIONShell Foundation (‘the Foundation’ or ‘SF’) is a charitable company limited by guarantee, incorporated on 31 May 2000 (company registration number 4007273) and registered with the Charity Commission as a charity on 2 June 2000 (charity registration number 1080999). Since 14 February 2008, the Foundation has had charity registration with the tax authorities in The Netherlands (as an algemeen nut beogende instelling, registration number 823793059). The Foundation is also registered in the United States of America under section 501(c)(4) of the Internal Revenue Code, identification number 98 0368454.

The Foundation has a single subsidiary, SF Investment Management Limited, (company number 09425215), which was incorporated in 2015 to manage a restricted programme with USAID to generate employment in Iraq through investment in small and growing businesses. On completion of this programme, any proceeds from the investments are to be returned to USAID.

Structure, Governance and Management

RELATIONSHIP WITH THE SHELL GROUPTo ensure clarity in the relationship of the Foundation to Royal Dutch Shell plc and its subsidiaries (‘the Shell Group’), the Foundation Board includes independent members who have no direct relationship with the Shell Group, known as the ‘Nominated Trustees’. They are selected for their experience and eminence in the Foundation’s field of activities.

The Foundation was formally incorporated on 31 May 2000 and registered as a charity on 2 June 2000. Between incorporation and 31 December 2000, donations of $259 million were received from the Shell Group, of which $256 million was in the form of an expendable endowment and the balance as unrestricted funds.

In addition to the endowment, the Foundation has received restricted and unrestricted donations from the Shell Group totalling $221 million to the end of 2016.

GOVERNANCE AND INTERNAL CONTROLSTrustees are formally appointed by the sole member of the Foundation (The Shell Petroleum Company Limited).

New trustees are provided with information on trustee guidelines as prepared by the Charity Commission, and information on the Foundation as appropriate. Briefing discussions are held with the Director of the Foundation and other key staff. Trustees are requested annually to confirm any related party transactions.

The Trustees meet formally at least twice each year.

They review and approve:1. The Foundation’s financial results and statutory returns;2. Internal controls (including delegation of authorities and

segregation of duties);3. Risks associated with the Foundation’s activities and

appropriate mitigation measures in respect of these;4. The endowment investment returns, strategic asset

allocation, and performance of the fund manager;5. Social investment performance;6. A strategic plan and annual budget for the Foundation;7. Management accounts, variances from budget, and

non-financial performance indicators;8. The team’s performance against pre-determined

annual targets;9. Certain actions that are above the authority level of the

Foundation Management Team.

The Board is supported in items 1-3 by an Audit and Risk Committee (ARC); and by an Investment Committee (IC) for items 4-5.

The ARC comprises two Trustees and two independent experts, who invite the Foundation Director, CFO, internal and external auditors to attend as required. They take responsibility on behalf of the SF Board of Trustees to ensure that there is a framework for accountability; for examining and reviewing all systems and methods of control, both financial and otherwise, including risk analysis and risk management; and for ensuring that SF is complying with all aspects of the law, relevant regulations and good practice. It reports back to the Board and makes recommendations as appropriate.

The Investment Committee comprises two Trustees, two independent experts, the Director and CFO, advised by an independent investment advisor (Cambridge Associates). The remit of the IC is to establish, review, recommend and report to the Board on the Investment strategy and policy for all financial investments; the selection and performance


Report of the Trustees for the year ended 2016 (continued)

of fund manager(s) including the Investment management agreement(s); and the financial performance of social investments.

The Trustees have delegated operational management of the Foundation to the Director, who reports on the performance against the strategic plan and budget as approved by the Trustees.

STATEMENT OF TRUSTEES’ RESPONSIBILITIESThe Trustees are responsible for preparing the Report of the Trustees (including the Strategic Report) and the financial statements in accordance with applicable law and regulations.

Company law requires the Trustees to prepare financial statements for each financial year. Under that law the Trustees have prepared the financial statements in accordance with United Kingdom Accounting Standard FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (2006 Companies Act). Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the Foundation and the Group and of the incoming resources and application of resources, including the income and expenditure, of the Group for that period. In preparing these financial statements, the Trustees are required to:

■ select suitable accounting policies and then apply them consistently;

■ observe the methods and principles in the FRS102 Charities SORP;

■ make judgements and estimates that are reasonable and prudent;

■ state whether FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” has been followed, subject to any material departures disclosed and explained in the financial statements;

■ notify its member in writing about the use of disclosure exemptions, if any, of FRS 102 used in the preparation of financial statements; and

■ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Foundation will continue in business.

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Foundation’s transactions and disclose with reasonable accuracy at any time the financial position of the Foundation and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets

of the Foundation and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In so far as the Trustees are aware:(a) there is no relevant audit information of which the

company’s auditors are unaware; and(b) they have taken all the steps that they ought to have

taken as trustees in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

GRANT COMMITMENTSThe Foundation identifies strategic partners it wants to support in order to further its charitable purposes for the public benefit, and does not encourage the submission of unsolicited grant applications.

As part of its risk control framework, the Foundation conducts due diligence assessments of these prospective grantees (grant recipients) prior to awarding grants to confirm that, at the time of grant approval, there is an expectation that the project is likely to be successful and, therefore, that the grant commitment will be paid in full. Grants are assessed and approved by the Board of Trustees or Management Team, depending on value.

Certain milestones must be met by the grantee to receive scheduled grant payments to ensure they remain aligned to the Foundation’s charitable objectives. The expectation upon signing the Letter of Commitment (LOC) is that the grantee will be able to achieve the milestones. Progress against milestones is monitored using a variety of methods including reports from the grantee, meetings with grantees, reviews of their business, visits to the grantee sites and receiving feedback from the communities the grantee is serving. Where a grantee does not meet a milestone the payment of that instalment of the grant may be deferred until such time as the milestone has been met.

SOCIAL INVESTMENTSGrant funding continues to be SF’s standard mechanism for early support to partners. Other forms of social investment will be considered, in relation to the scale-up of existing Foundation strategic partners and in ways that have additionality (e.g. leveraging support from other investors), and this may include convertible grants, repayable grants/loans, fund investments, equity, and financial guarantees. These social investments further the delivery of SF’s charitable objectives and KPIs.



Any private benefit generated by SF’s social investments is incidental to the pursuit of the public benefit and its charitable objectives. The Foundation seeks to liquidate its social investments once the investee enterprise is sufficiently mature and profitable to attract a broader range of growth stage investors and funding. However, grants may continue to be provided for more mature partners to fund specific research areas, new products, or market entries that otherwise would not be commercially viable.

OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFITThe primary objectives of the Foundation are stated in its governing document and include:1. The protection and preservation of the environment and

public health by means of education and research into the provision and use of energy in ways that reduce or eliminate harmful emissions. The Foundation has pursued this objective via grants made through its Access to Energy, Sustainable Mobility and Incubator programmes.

2. The relief of poverty, suffering, hardship and distress. This objective has been furthered via grants made through all the Foundation’s programmes.

These objectives have been met through the activities described in this report.

The Trustees confirm they have complied with the guidance contained in the Charity Commission’s general guidance on public benefit in section 4 of the Charities Act 2011 when reviewing the Foundation’s aims and objectives and when considering grants to be awarded. The Foundation’s Articles permit it to make grants to further these objectives anywhere in the world, and its policy is to act as a truly international grant-making foundation.

Financial Review

FINANCIAL ACTIVITIESThe Statement of Financial Activities is included with the financial statements on page 31.

PRINCIPAL FUNDING SOURCESThe Foundation’s annual grant programmes are funded by distributions from its endowment fund. Shell Group made unrestricted donations of $6 million in 2016, and agreed ‘in principle’ to funding beyond this in the event that the endowment does not generate sufficient income for the Foundation to achieve its objectives and maintain impact. Restricted donations totalling $21.3 million were received from DFID, USAID and OFID enabling the Foundation to amplify its programme delivery.

RESERVESThe Foundation holds an endowment reserve to sustain the funding of its annual programmes. The Trustees adopted a new investment policy in 2011, which aims to maintain the real value of both distributions and the endowment asset value.

The Foundation’s policy for unrestricted reserves is to maintain sufficient bank balances to meet payments due in the next three months. This level will be maintained by liquidating endowment assets as and when required. The reserve policy is reviewed regularly. There was a sufficient level of cash at the year end to meet the minimum unrestricted reserves requirement of $13 million.

At the year end the restricted funds were in surplus to the extent of social investments made under the DFID TIME partnership. On repayment, these funds will be redirected to new projects to further SF’s charitable objectives consistent with the Partnership governing documents.

ENDOWMENT INVESTMENT POLICY AND PERFORMANCEIn 2011, following a review of the investment objectives and strategy, the Trustees adopted an investment policy, which aims to maintain the real value of both distributions and the endowment asset value. To achieve this, the endowment is invested in a diversified fund of global equities, hedge funds and fixed income funds. In order to mitigate the risk associated with currency exposure, the investment portfolio is partially hedged back to the Foundation’s functional currency of US Dollars (by the investment manager) through the use of forward contracts.

In 2016 capital markets were volatile with investment performance swinging from negative in the first quarter to an overall return of 5.8% in 2016, slightly ahead of the benchmark. The total return on the equity portfolio was 7.1%, dampened slightly by the weighting to bonds and hedge funds which returned 3%. The strongest equity performance was in the US with a 12% return, emerging markets returned 11%, Pacific Rim returned 4%, whilst Europe was slightly negative.

The fixed income portfolio showed strong performance in the actively managed credit pool of 5.8%, offset by negative returns of 1.2% from the US Treasury pool.

The hedge fund portfolio returned 3.1%, outperforming its benchmark by 1.2%, mainly as a result of the strong performance of multi-strategy funds and event driven funds. The objective of the hedge fund portfolio is to avoid directional market exposures.

The Foundation also holds programme related investments, which are held to further its charitable aims and, at the same time, potentially achieve a financial return versus pure grant giving.



PLANS FOR FUTURE PERIODSSee the review of achievements and performance on pages 9 to 23 for details of future plans.

PRINCIPAL RISKS AND UNCERTAINTIESThe Trustees have identified the major risks to which the Foundation is exposed. The level of exposure for each risk is assessed by considering the likelihood of occurrence, the potential consequences of occurrence and the effectiveness of existing controls in place to mitigate the risk. The Trustees review these assessments at least twice a year, at their board meetings. None of the key risks is currently regarded as posing an unacceptable residual exposure.

These risks include:

Staffing: retaining and attracting suitably experienced professionals that can add more-than-the-money to help its strategic partners grow to scale and deliver its charitable objectives. This risk is managed through good staff planning, competitive remuneration structure benchmarked and aligned with industry, and attracting high quality secondees from the Shell group. The Foundation has filled its critical vacancies and been successful in attracting talented individuals in recent recruitment exercises.

Strategic partners: the Foundation is reliant on strategic partners to take programmes forward and build both developmentally sound and financially viable businesses. This risk continues to be managed through the careful selection process for new strategic partners, and ongoing management of existing partners.

Independence and relationship with Shell: the Trustees explicitly recognise their charitable responsibilities in this regard by stating formally in the Shell Foundation’s Business Principles that the Foundation’s activities will always be consistent with achieving its mission and cannot promote the commercial interests of the Shell Group, and that any benefit that may accrue to the Shell Group from the Foundation’s activities will be incidental and outweighed by the contribution to the Foundation’s charitable objectives. The Foundation operates an assurance system to identify, assess and validate this.

Financial Risk: The long-term financial independence of the Foundation depends on the performance of the endowment fund. In response to this risk, the Trustees implemented new investment objectives in 2011. Volatility will remain in the value of the fund due to a relatively high equity exposure targeting long term capital growth. The Trustees also secured agreement from Shell to provide additional ‘top-up’ unrestricted donations until

at least 2020 in the event that the endowment does not generate sufficient returns to achieve the Foundation’s objectives and maintain impact.

The Foundation also has a number of social investments. The key financial risk associated with these investments is cash flow risk around the size, timing and reliability of returns. This cash flow risk is mitigated by regular monitoring of the investments and taking a prudent approach with respect to these returns in its cash flow forecasting.

Monitoring and Evaluation: A delivery risk on monitoring and evaluation is recognised as the Foundation has grown significantly over the last few years requiring renewed focus on implementing efficient and systematic ways to measure its charitable performance and research outcomes. Additional staff are being recruited and processes implemented to mitigate this risk.

Independent AuditorThe sole member approved the adoption of Elective Resolutions on 28 March 2001, in accordance with the Companies Act 2006, to dispense with (a) the holding of Annual General Meetings, (b) the laying of report and financial statements before general meetings each year, and (c) the annual re-appointment of auditors.

Ernst & Young LLP accordingly shall be Independent Auditor of Shell Foundation pursuant to section 487(2) of the Companies Act 2006. In accordance with the Companies Act 2006, any member or the Auditors may require the report and financial statements to be laid before a general meeting by depositing a notice to that effect at the registered office of the Foundation not later than 28 days after the despatch of the financial statements and reports to members.

The Report of the Trustees, including the Strategic Report, were approved by the Trustees and signed on their behalf by order of the Board:

Maxime Verhagen, Acting Chair

1 June 2017

Jo.Chandler

Stamp


Independent Auditor’s report to the member of Shell Foundation

We have audited the financial statements of Shell Foundation for the year ended 31 December 2016 which comprise the Consolidated Statement of Financial Activities, the Consolidated Summary Income and Expenditure Account, the Balance Sheets, the Cash Flow Statements and the related notes 1 to 26. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 “The Financial Reporting standard applicable in the UK and Republic of Ireland”.

This report is made solely to the company’s member, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s member those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s member as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Trustees and AuditorAs explained more fully in the Trustees’ Responsibilities Statement set out on page 26, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charitable company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Trustees and financial

statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statementsIn our opinion the financial statements:

■ give a true and fair view of the state of the group’s and company’s affairs as at 31 December 2016 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;

■ have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice), including FRS 102 “The Financial Reporting standard applicable in the UK and Republic of Ireland”; and

■ have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006In our opinion, based on the work undertaken in the course of the audit:

■ the information given in the Strategic Report and the Report of the Trustees is consistent with the financial statements.

■ The Strategic Report and the Report of the Trustees have been prepared in accordance with applicable legal requirements

Matters on which we are required to report by exceptionIn light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have identified no material misstatements in the Strategic Report and the Report of the Trustees.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

■ adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or

■ the financial statements are not in agreement with the accounting records and returns; or


Independent Auditor’s report to the member of Shell Foundation (continued)

■ certain disclosures of trustees’ remuneration specified by law are not made; or

■ we have not received all the information and explanations we require for our audit.

Stephen Reid (Senior Statutory Auditor)for and on behalf of Ernst & Young LLP, Statutory Auditor Edinburgh7 June 2017

Notes:

1. The maintenance and integrity of the Shell Foundation’s web site is theresponsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.

2. Legislation in the United Kingdom governing the preparation anddissemination of financial statements may differ from legislation in other jurisdictions.


Consolidated statement of financial activitiesfor the year ended 31 December 2016

Note

UnrestrictedFunds2016$000

RestrictedFunds2016$000

EndowmentFunds2016$000

TotalFunds2016$000

Income and endowments from- Donations 2 6,000 21,324 - 27,324- Reduction of Payables 2 - 1,288 - 1,288- Donated services 2 510 - - 510- Investments 3 144 6 7,808 7,958

Total Incoming Resources 6,654 22,618 7,808 37,080

Expenditure onRaising FundsInvestment management costs - - (348) (348)

Total Cost of Raising Funds - - (348) (348)

Charitable Activities- Access to Energy (8,500) (14,900) - (23,400)- Sustainable Mobility (5,723) - - (5,723)- Sustainable Job Creation (3,758) 1,211 - (2,547)- Incubator (2,429) - - (2,429)- Policy and Advocacy (83) - - (83)

Total Charitable Activities 4 (20,493) (13,689) - (34,182)

Total Resources Expended (20,493) (13,689) (348) (34,530)

Net gains/(losses) on investments

Realised gains on the revaluation and disposal of investment assets - - 8,382 8,382

Unrealised gains on the revaluation and disposal of investment assets - - 9,132 9,132

Net income/(expenditure) before transfers (13,839) 8,929 24,974 20,064

Transfers between funds 25,152 - (25,152) -

Net income/(expenditure) 11,313 8,929 (178) 20,064

Net Movement in Funds 11,313 8,929 (178) 20,064

Fund balances brought forward at 1 January 29,467 (5,236) 442,838 467,069

Fund balances carried forward at 31 December 40,780 3,693 442,660 487,133

The Foundation has elected to take the exemption under section 48 of the Companies Act 2006 not to present the Foundation statement of financial activities. The Foundation’s net movement in funds in 2016 was $20 million surplus. All incoming resources, resources expended and resulting net movements in funds were derived from continuing activities.

The accompanying notes form part of these financial statements.


Consolidated statement of financial activities for the year ended 31 December 2015 (restated)

Note




TotalFunds2015$000

Income and endowments from- Donations 2 6,000 1,978 - 7,978- Conversion of convertible grant 2 1,532 - - 1,532- Donated services 2 605 - - 605- Investments 3 - - 7,555 7,555

Total Incoming Resources 8,137 1,978 7,555 17,670

Expenditure on Raising fundsInvestment management costs - - (387) (387)

Total Cost of Raising Funds - - (387) (387)

Charitable Activities - Access to Energy (9,608) (1,277) - (10,885) - Sustainable Mobility (3,158) - - (3,158) - Sustainable Job Creation (182) (9) - (191) - Incubator (3,674) (538) - (4,212) - Policy and Advocacy (159) - - (159) - Other - - - -

Total Charitable Activities 4 (16,781) (1,824) - (18,605)

Total Resources Expended (16,781) (1,824) (387) (18,992)

Net gains/(losses) on investments

Realised gains on the revaluation and disposal of investment assets - - 9,614 9,614

Unrealised gains on the revaluation and disposal of investment assets - - (24,926) (24,926)

Net income/(expenditure) before transfers 1 (8,644) 154 (8,144) (16,634)

Transfers between funds 21,513 - (21,513) -

Net income/(expenditure) 12,869 154 (29,657) (16,634)

Net Movement in Funds 12,869 154 (29,657) (16,634)

Fund balances brought forward at 1 January 16,598 (5,390) 472,495 483,703

Fund balances carried forward at 31 December 29,467 (5,236) 442,838 467,069


Consolidated income and expenditure accountfor the year ended 31 December 2016

2016$000

2015$000

Income 29,122 10,115Gains/(losses) on investments 17,514 (15,312)Interest and investment income 7,958 7,555Gross income in the reporting period 54,594 2,358

Expenditure (34,530) (18,992)Total expenditure (34,530) (18,992)

Net surplus of income over expenditure for the year 20,064 (16,634)


Consolidated and charity balance sheets as at 31 December 2016

Note

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Fixed AssetsEndowment 10 442,660 442,866 442,660 442,866Social investments 11 39,313 20,938 36,869 20,938Subsidiary undertakings 12 - - 2,715 3,991

Total Fixed Assets 481,973 463,804 482,244 467,795

Current Assets

Debtors:amounts falling due within one year 13 10,067 7,493 10,067 7,493amounts falling due after one year 13 2,390 - 2,390 -

12,457 7,493 12,457 7,493

Cash at bank and in hand 14 18,820 18,031 18,522 14,031Social Investments 11 2,849 3,317 2,849 3,317Total Current Assets 34,126 28,841 33,828 24,841

Creditors: amounts falling due within one year 15 (24,777) (20,827) (24,768) (20,818)

Net Current Assets 18 9,349 8,014 9,060 4,023

Total Assets less Current Liabilities 491,322 471,818 491,304 471,818

Creditors: amounts falling due after more than one year 16 (4,189) (4,749) (4,189) (4,749)

Net Assets 487,133 467,069 487,115 467,069

The funds of the Foundation: Endowment Funds 17 442,660 442,838 442,660 442,838Restricted income Funds 17 3,693 (5,236) 3,675 (5,236)Unrestricted income Funds 17 40,780 29,467 40,780 29,467

Total Foundation Funds 487,133 467,069 487,115 467,069

The accompanying notes form part of these financial statements. The financial statements on pages 31 to 58, authorised for issue, approved by the Trustees and signed on their behalf by:

Maxime Verhagen, Acting Chair

1 June 2017

Jo.Chandler

Stamp


Cash flow statement and consolidated cash flow statementfor the year ended 31 December 2016

Note

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Net cash used in operating activities 19 (2,838) (5,958) (2,836) (5,958)

Cash flow from investing activitiesCash expended on endowment fund fees (348) (387) (348) (387)Investment income from endowment funds 7,808 7,571 7,808 7,571

Endowment Fund 10Purchase of investments (131,757) (68,636) (131,757) (68,636)Sale of investments 152,010 80,921 152,010 80,921Income received (paid) on derivatives - (664) - (664)Loss on foreign exchange (860) (990) (860) (990)Decrease (Increase) in investment cash (1,330) 3,698 (1,330) 3,698

Social Investments 11Purchase of programme related investments (14,314) (14,231) (10,614) (14,231)Purchase of mixed motive investments (10,000) - (10,000) -Sale of programme related investments 2,418 1,402 2,418 1,402Investment in subsidiary - - - (4,000)

Net cash from investing activities 3,627 8,684 7,327 4,684

Cash flow from financing activitiesTransfer out from endowment fund (25,152) (21,513) (25,152) (21,513)Transfer in to unrestricted funds 25,152 21,513 25,152 21,513

Net cash used in financing activities - - - -

Net increase in cash and cash equivalents 789 2,726 4,491 (1,274)

Cash and cash equivalents at the beginning of the year 18,031 15,305 14,031 15,305Cash and cash equivalents at the end of the year 18,820 18,031 18,522 14,031

The accompanying notes form part of these financial statements.


Notes to the financial statements for the year ended 31 December 2016

1. Summary of Significant Accounting Policies

GENERAL INFORMATIONShell Foundation (‘the Foundation’ or ‘SF’) and its subsidiary, SF Investment Management Limited (together ‘the Group’) is an independent charity established by the Shell Group in 2000 to create and scale new solutions to global development challenges. We apply business thinking to major social and environmental issues linked to the energy sector – and seek to leverage the skills and networks of Shell where possible to deliver greater development impact.

The company is a private company limited by guarantee and is incorporated in England. The address of its registered office is Shell Centre, York Road, London, SE1 7NA.

STATEMENT OF COMPLIANCEThe financial statements are prepared in accordance with the ‘Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standards applicable in the UK and Republic of Ireland (FRS 102)’, effective 1 January 2015, and in accordance with applicable United Kingdom accounting standards and the Companies Act 2006. The accounting policies have been applied consistently, other than where new policies have been adopted in accordance with the Charities Act 2011.

BASIS OF PREPARATIONThese consolidated and separate financial statements are prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments. Social investments are recorded at historical cost less any impairment. The financial statements are prepared on a going concern basis.

The Trustees are assured of the Foundation’s ability to continue on a going concern basis due to the liquid nature of the large endowment – the fund is sufficient to cover 20 years of expenditure at the current planned rate of around $20 million per annum for unrestricted funds.

The Trustees have reviewed the presentation of gains and losses on investments against the requirements of the SORP and re-presented the 2015 statement of financial activities to disclose gains and losses on investments before net income / (expenditure) for the year. This was a presentational adjustment only and had the effect of increasing net expenditure for the year ended 31 December 2015 by $15.3 million. There was no impact on the net movement in funds for the year, or on the net assets or total funds of the Foundation for the year and consequently there was no requirement to re-present the balance sheets.

BASIS OF CONSOLIDATIONThe financial statements consolidate the results of the Foundation and its wholly owned subsidiary SF Investment Management Limited on a line by line basis. A separate Statement of Financial Activities and Investment and Expenditure Account for the Foundation has not been presented as the Foundation has taken advantage of the exemption afforded by section 408 of the Companies Act 2006.

FOREIGN CURRENCYFunctional and presentation currency

The Group financial statements are presented in United States dollars and rounded to thousands.

The Foundation’s functional and presentational currency is the US dollar. This is because the operating currency of the Foundation is US Dollars, reflecting the high proportion of grants awarded and donations received in dollars and consequent dollar weighting of its investment funds.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the daily mean rate entered into the accounting system at the beginning of the month in which the transaction occurred.

At each period end, foreign currency monetary items are translated using the closing exchange rate. The exchange rate used at the year end to translate Sterling (GBP £) to US Dollars (USD $) was GBP/USD $1.2290 (2015 was GBP/USD $1.4828).


Notes to the financial statements (continued)for the year ended 31 December 2016

FUND ACCOUNTINGFunds held by the Foundation are either:

■ general unrestricted income funds, that are expendable at the discretion of the Trustees in furtherance of the Foundation’s objects; or

■ restricted income funds, that are expendable at the discretion of the Trustees in furtherance of the specific purpose stated by the donor; or

■ expendable endowment funds, whose principal purpose is for investment to build the asset base of the Foundation to a sustainable level but which can be converted at the discretion of the Trustees into expendable income when needed.

INCOME AND ENDOWMENTSDonations and investment income are included in the Statement of Financial Activities when the Foundation is legally entitled to the income, receipt is probable and its amount can be measured reliably. Restricted donations include government grants as detailed further in Note 2. Donated services, if applicable, are included in income at a valuation, which is an estimation of the value to the Foundation. Donated services of $0.5 million were received in 2016 (2015: $0.6 million).

Investment income arising from expendable endowment fund investments is added to endowment funds. This reflects the fact that the income is currently reinvested, in accordance with the investment strategy.

EXPENDITUREAll expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to programmes on a basis consistent with the use of resources. Support costs are allocated across the programmes based on the value of grants given out by that programme and direct costs attributable to that programme.

COSTS OF RAISING FUNDSThe costs of generating funds comprise investment management costs for both income generation and capital maintenance.

CHARITABLE ACTIVITIESCharitable activity costs are comprised of grants, costs for processing grants and applications, direct costs invoiced to the Foundation, and for the administration and monitoring of projects. These costs include costs incurred for staff undertaking these activities. Staff costs are comprised of charges in respect of the services of employees of Shell Group companies in relation to Foundation activities. The Foundation has no direct employees.

Grant commitments charged as charitable activity costs in the Statement of Financial Activities represent the new commitments awarded by the Foundation in the year, as evidenced by the Letters of Commitment (LOCs) signed in that year. Grant commitments for which payments were outstanding at the year-end are shown as liabilities in the Balance Sheet. The commitments are not discounted.

Within support costs are costs for the strategic running of the Foundation itself as an organisation, as distinct from directly pursuing its charitable activities including such items as external audit, legal advice for trustees and costs associated with constitutional and statutory requirements. Indirect costs include a proportion of management (and other staff) time spent on strategic activities, together with donated overhead costs.

VALUE ADDED TAX (‘VAT’)The Foundation is registered for Value Added Tax (‘VAT’) as part of the Shell International Petroleum Company VAT Group. Services provided by members of the same VAT group are not taxable. VAT incurred by the Foundation on all other expenditure is not recoverable, as the Foundation does not make any taxable supplies. Irrecoverable VAT is recognised as part of the cost of acquisition of an asset or as part of an item of expense.

GAINS AND LOSSES ON FOREIGN EXCHANGEMonetary assets and liabilities denominated in currencies other than US Dollars are converted to US Dollars at the rate ruling at the balance sheet date. Items of income and expenditure in non-US Dollar currencies are converted at the daily mean rate entered into the accounting system at the beginning of the month in which the transaction occurred. Non-US Dollar items primarily relate to UK operating costs, which are incurred in pounds sterling (‘GBP’), as well as a proportion of grants awarded in GBP and Euros. All realised and unrealised gains and losses on exchange are reflected in the Statement of Financial Activities.



INVESTMENTSInvestments are included at closing mid-market value at the balance sheet date. Any realised and unrealised gains and losses on revaluation or disposals form part of the fund in which the investment is held at the time of the revaluation or disposal. Realised and unrealised gains and losses are shown separately in the Statement of Financial Activities.

Social investments are carried at cost less any provision for impairment. Such investments are not able to be carried at fair value as there is no open market for such investments. All social investments are subject to review, and any impairment is charged to the Statement of Financial Activities.

FINANCIAL ASSETS

(i) Classification

The Foundation classifies its financial assets in the following categories: at fair value through SOFA; loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

1. Financial assets at fair value through the SOFAFinancial assets at fair value through the SOFA are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current investments.

2. Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Foundation’s loans and receivables comprise trade, contractual loans and cash on the balance sheet.

(ii) Recognition and measurement

Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through the SOFA. Financial assets carried at fair value through the SOFA are initially recognised at fair value, and transaction costs are expensed in the SOFA. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Foundation has transferred substantially all risks and rewards of ownership. Loans and trade and other receivables are subsequently carried at amortised cost using the effective interest method, less any provision for impairment.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through the SOFA’ category are presented in the SOFA within interest income or expenses in the period in which they arise.

FINANCIAL INSTRUMENTSThe Foundation has the US Dollar as its functional currency. In order to mitigate the risk associated with investing globally in multiple currencies, the investment portfolio is hedged (by the fund managers) through the use of forward foreign exchange contracts. The mandate is to hedge 100% of non-US Dollar denominated fixed income investments and 100% of non-US dollar hedge fund investments. Unsettled forward contracts are marked to market at the balance sheet date. All realised and unrealised gains and losses on forward foreign exchange contracts are combined in the Statement of Financial Activities with the gains and losses on the underlying investment portfolio.

FINANCIAL LIABILITIES

(i) Classification

The Foundation classifies its financial liabilities in the following categories: at fair value through the SOFA; and amortised cost. The classification depends on the nature of the underlying liabilities, with management determining the classification of financial liabilities at initial recognition.



1. Financial liabilities at fair value through the SOFAFinancial liabilities at fair value through the SOFA are those held for trading, and derivatives in a negative fair valueposition. These liabilities are classified as current where expected settlement is within 12 months, otherwise they areclassified as non-current liabilities.

2. Financial liabilities at amortised costAll other financial liabilities which do not meet the criteria of fair value through the SOFA are held at amortised cost.

(ii) Recognition and measurement

Financial liabilities are initially recognised at fair value, and then subsequently at either fair value through the SOFA or at amortised cost. Those financial liabilities held at fair value through the SOFA are revalued at each balance sheet date, with gains and losses recognised directly in the SOFA. All other liabilities are carried at amortised cost using the effective interest rate method.

INVESTMENT IN SUBSIDIARIES AND PARTICIPATING UNDERTAKINGSThese comprise investments in shares and loans that the Foundation intends to hold on a continuing basis. The investments in subsidiaries and participating undertakings are stated at cost, less provisions for impairment. The Foundation carries out a review for the potential impairment of an investment if events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. Such impairment reviews are performed in accordance with SORP 21.28. Any impairments are recorded in the SOFA.

The Foundation had significant influence in two associate entities:

(i) Stichting Smart Freight Centre (SFC), with a 33% voting position on the Board. SFC has no equity or shares. The Shell Foundation share of net assets is not considered material and therefore equity accounting has not been applied. Further information on the activity of SFC during the year is provided in the Sustainable Mobility section of the Report of the Trustees.

(ii) Factor(E) PBC, with a 33% voting position on the Board. Equity accounting has not been applied as the amount is not considered material. Further information on the activity of Factor(E) PBC during the year is provided in the Access to Energy section of the Report of the Trustees.

CASH AND CASH EQUIVALENTSCash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTYEstimates and judgements are evaluated and based on historical experience and reasonable expectations of future events. Income and expenditure are recognised where it is probable that there will be an inflow or outflow of resources; restricted income is accrued to the extent that the conditions for receipt have been met, and liabilities recognised for expenditure that has been committed by the Foundation to its partners via signed letters of commitment with the partners agreeing to any terms. Social investments are carried at cost less any provision for impairment. Such investments are not able to be carried at fair value as there is no open market for such investments. All social investments are subject to impairment reviews. Provisions for share-based payments are estimated based on past practice of cash settlements.



2. Donations and other income2016$000

2015$000

Cash and accruedUnrestricted

Shell Trading International Ltd 6,000 6,000Shell International Ltd – donated services 510 605

Restricted donation – Government relatedDepartment for International Development 18,611 1,478United States Agency for International Development 2,100 -OPEC Fund for International Development 700 500Inter-American Development Bank (87) -

Other IncomeRestricted donation – Government related – payable reduction

United States Agency for International Development 1,288 -Unrestricted – conversion of grant

Envirofit Inc - 1,532

29,122 10,115

The geographical markets donations were received from: United Kingdom $25.1 million (2015: $8 million), worldwide $0.7 million (2015: $0.5 million) and United States of America $2.1 million (2015: $1.5 million).

Restricted donations – government related

Department for International Development (DFID)NEADM (new applications and delivery models): The UK committed £4.5 million (approximately $6.9 million) to support a four year programme to develop new, innovative clean energy products and business models specifically for low-income consumers in Africa and Asia. Donations of £0.5 million ($0.6 million) were received and recognised in 2016 against this programme and a further £0.4 million ($0.5 million) income was recognised in 2016 as being probable, based on the value of Shell Foundation commitments to partners. This programme is now fully committed and income fully recognised.

Nomou (meaning growth in Arabic): DFID have committed £4.5 million grant funding to support 50% of Nomou’s operating and advisory costs in Egypt and Jordan. The Project will assist start-up and growing small and medium-sized enterprises in Egypt and Jordan, developing sustainable employment and local socio-economic impact through the delivery of business support services, medium-term risk capital, and support for market linkages. Donations of £0.9 million ($1.3 million) were received and recognised in 2016 against this programme and a further £0.8 million ($1.0 million) income was recognised in 2016 as being probable, based on the value of Shell Foundation commitments to partners.

DFID TIME (Transforming Inclusive Energy Markets): Through the DFID TIME partnership, DFID and Shell Foundation, in collaboration, have committed £60.0 million to further their mutual objective of accelerating global access to modern energy services for low-income households and small businesses. Donations of £6.1 million ($8.0 million) were received and recognised in 2016 against this programme and a further £5.9 million ($7.2 million) income was recognised in 2016 as being probable, based on the value of Shell Foundation commitments to partners.



OPEC Fund for International DevelopmentEnhancing Energy Access for Agri-business Development in Africa and Asia: The project aims at creating a local renewable power source that could provide cheaper, more reliable and better quality energy to low-income households in rural areas of Africa and Asia. No donations were received in 2016 but $0.7 million income was recognised in 2016 as being probable, based on the value of Shell Foundation commitments to partners.

Inter-American Development Bank (IADB)IADB will make available up to $1.0 million to accelerate social impact enterprises in Latin America and the Caribbean through the Shell Foundation incubation/scale-up methodology. The donation will target innovative market-based solutions in energy and sustainable infrastructure for the base of the pyramid population. $0.4 million cash was received in 2016 for donations already recognised as being probable in prior years. Further cash will be remitted on completion of certain milestones. In 2016 there was a reduction in income recognised of $0.1 million as there were no projects approved to use the funds.

United States Agency for International Development (USAID)PACE - USAID have committed $2.2 million grant funding from PACE over three years, against which Shell Foundation (SF) would contribute $12.9 million in grant funding and ongoing business support to grantees. Three complementary acceleration models: Factor(E), Sangam and SF’s in-house Incubator have a mandate to support entrepreneurs seeking to provide access to modern energy services for low-income communities in developing countries, with a focus on Africa and Asia. SF envisages that a significant aspect of USAID’s additionality to SF will be its support beyond funding, including its networks and knowledge, to help build pipeline and leverage investment. Donations of $0.2 million were received and recognised in 2016 against this programme and a further $1.9 million income was recognised in 2016 as being probable, based on the value of Shell Foundation commitments to partners.

Other income – government related

United States Agency for International Development (USAID)Nomou Iraq – USAID have committed a repayable donation of $4.0 million to support job creation in Iraq. This has been invested with the GroFin Nomou Iraq Fund: A unique integrated solution of patient risk capital and end-to-end business support to start-up and growing businesses, to catalyse the SME sector as a major driver of sustainable job creation in Iraq. An impairment in this investment has been recognised during the year resulting in a subsequent reduction in the amount payable to USAID, which is recognised as income. In 2016, the reduction in payable was $1.3 million.



3. Investment income2016$000

2015$000

Interest 150 -Fixed interest securities 436 496Dividends 7,372 7,059

7,958 7,555

Investment income has been derived from dividends received from equity investments and interest from fixed interest securities held within the endowment fund. These amounts are reinvested in the endowment fund.

4. Charitable Activities Expenditure by ProgrammeGrants

$000Direct costs

$000Support costs

$0002016$000

2015$000

Access to Energy (21,430) (1,156) (814) (23,400) (10,885)Sustainable Mobility (4,225) (779) (719) (5,723) (3,158)Sustainable Job Creation 2,140 (4,218) (469) (2,547) (191)Incubator (1,846) (278) (305) (2,429) (4,212)Policy and Advocacy - (83) - (83) (159)

Total for 2016 (25,361) (6,514) (2,307) (34,182) (18,605)

Total for 2015 (13,935) (2,255) (2,415) (18,605)

Direct costs include goods and services invoiced to the Foundation together with directly attributable manpower, and are allocated to the activity they relate to. Other support costs, that cannot be directly linked to an activity, are apportioned across the programme themes on the basis of total grant and direct costs. The activities making up these costs are shown in note 5 below.

5. Direct and Support CostsDirect costs

$000Support costs

$0002016$000

2015$000

Manpower costs (1,933) (1,125) (3,058) (2,897)External services (124) (29) (153) (305)Communications (70) (289) (359) (74)Travel (362) (121) (483) (520)Training (16) (30) (46) (44)Impairment of social investments (3,989) - (3,989) -External audit fees (inclusive of VAT) - (47) (47) (79)Legal fees - (9) (9) (5)Donated overhead expenses - (510) (510) (605)Trustee expenses - (21) (21) (14)Sundry - (28) (28) (116)Exchange gain/loss (20) (98) (118) (11)

Total (6,514) (2,307) (8,821) (4,670)

External service costs are those paid directly to a third party supplier for services (including professional fees and consultancy) rather than being paid via a grantee intermediary. Direct costs for external services shows costs at the project level, support costs are Foundation-wide. Within external services for 2016, there were no payables made to Shell Group companies (2015: nil).

Net incoming resources are stated after charging auditor’s remuneration for audit services (‘External Audit Fees’) as shown above. These are the fees for the audit of the Group’s Financial Statements.



6. Grants expenditure

The top 20 Grantees in 2016 (excluding repayable grants and social investments) are listed below, together with their corresponding 2015 commitments.

Grantee NamePurpose of Project Programme

2016$’000

2015$’000

CrossBoundary EnergyInvestment for commercial and industrial solar installations in Sub-Saharan Africa Access to Energy 2,225 250

Factor(E) Ventures PBCGrowing the number of access to energy transformational solutions incubated in India and East Africa Access to Energy 1,900 -

Redavia GmbH Scale solar farm container leasing in Africa Access to Energy 1,771 1,094

d.light DesignAffordable energy access Haiti; PAYG solar home system Access to Energy 1,700 -

Village Industrial PowerEnergy for agriculture (productive use) Access to Energy 1,600 -

Sangam Ventures LLCDeveloping new approaches to accelerate entrepreneurship in the energy sector in India; Driving early stage innovation in energy access in India Access to Energy 1,600 1,080

Husk Power Systems IncSupporting the development and extension of solar/biomass hybrid systems in India and Tanzania Access to Energy 1,600 750

Lendable IncEnd borrower credit assessment to enable receivable based financing Access to Energy 1,500 300

M-KOPA UK LimitedCatalysing the evolution of off-grid power markets Access to Energy 1,375 0

Global Off-Grid Lighting AssociationMultiyear support to achieve long-term sustainability Access to Energy 997 438

Persistent Energy Capital LLCNew models to accelerate access to energy in Africa

Access to Energy; Incubator 800 -

SparkMeter IncAccelerating energy access through low cost smart meters Access to Energy 661 1,377

Logistimo India Private LimitedBuilding last mile distribution solutions Access to Energy 650 665

Buen Manejo del Campo, SA (Sistema Biobolsa)Energy through biogas as fuel Access to Energy 600 -

Envirofit International IncHealth study on household air pollution in Honduras, development of PAYGo LPG solution for cookstoves Access to Energy 406 -

Subtotal Access to Energy 19,385 5,954



Grantee NamePurpose of Project Programme

2016$’000

2015$’000

Brought forward subtotal for top 20 grantees from previous page 19,385 5,954

SafeBoda (reg.Guinness Transporters Ltd)Motorcycle taxi company promoting safe, affordable mobility; Expanding SafeBoda services in Uganda and into Kenya Sustainable Mobility 1,200 100

Stichting Smart Freight CentreSmart Freight Centre Growth Funding 2016 Sustainable Mobility 1,125 1,252

World Resources Institute Implementation of sustainable transport and urban planning solutions Sustainable Mobility 1,000 1,200

Tugende LimitedAsset financing for motorcycle taxis where formal transport services are absent to provide last mile connectivity Sustainable Mobility 900 218

Subtotal Sustainable Mobility 4,225 2,770

GlobologyEnabling safe, affordable and sustainable transportation of passengers and goods in water-isolated communities in East Africa Incubator 302 -

Subtotal Incubator 302 -

Total Top 20 Grants 23,912 8,724

Total: Other Grants 1,449 -

Total: Grants (excl. repayable grants and social investments) 25,361 8,724



7. Trustee InformationNo Trustee received any remuneration from the Foundation during the year. The Foundation directly incurred or reimbursed travel expenses in relation to three Trustees, notaries fees and consulting fees for Board Appraisal review totalling $20,767 (2015: $13,852 in relation to two Trustees).

No indemnity insurance for trustees’ liability has been purchased by the Foundation. However, because all trustees are appointed by The Shell Petroleum Company Limited (the sole member) they are automatically covered by the Shell Group Directors and Officers liability insurance policy. Insurance cover is permitted under clause 21 of the Foundation’s Memorandum of Association.

8. Employee InformationAs an independent charity, Shell Foundation benefits in a number of ways from leveraging its links to Shell Group to achieve its mission and objectives. One example of this is with respect to staffing. The Foundation has no direct employees. Instead, employees of Shell Group companies are dedicated to work full-time for the Foundation in sole pursuit of its charitable objectives. Their remuneration is based on The Shell Group Global Pay Policy and their performance is assessed against pre-determined personal targets concerning their work for the Foundation as well as their wider contribution to meeting the Foundation’s overall charitable mission. The monthly average staff employed by Shell Group companies to work for the Foundation during the year was 17.3 (2015: 13.9). The monthly average split of employees between direct and support activities was direct 9.8 (2015: 6.1) and support 7.5 (2015: 7.8).

Manpower expenditure included in Direct and Support costs (note 6) charges at cost in respect of the services of these Shell Group employees, including salaries, taxes and office overhead costs. The salary and taxes paid by Shell Group companies in relation to these employees are as follows:

2016$000

2015$000

Wages and salaries (2,332) (1,968)Social security (233) (304)Other pension costs (258) (193)Performance Share Plan (PSP) (81) (185)

(2,904) (2,650)

SHARE-BASED COMPENSATION PLANSThe principal share-based employee compensation plan applied under The Shell Group Global Pay Policy to Shell Foundation staff is the PSP. Awards of Royal Dutch Shell plc shares under the PSP are granted to eligible Foundation employees based on performance. The actual amount of shares that may vest ranges from 0% to 200% of the awards, depending on the outcomes of prescribed performance conditions over a three-year period beginning on 1st January of the award year. Shares vest for nil consideration. The cash value of the awards is charged to The Foundation on vesting. The Foundation has estimated and recognised a liability of $0.3 million at the year-end for PSPs granted between 2014 and 2016 that vest in future years.

The salary and taxes paid by Shell Group companies in relation to key management personnel, consisting of the Director, Chief Financial Officer and two Deputy Directors, are as follows:

2016$000

2015$000

Wages and salaries (1,028) (1,000)Social security (113) (141)Other pension costs (95) (111)Vesting performance share plan options (81) (185)

(1,317) (1,437)



The number of Shell Group employees working on Foundation activities whose emoluments were above $80,000 is as follows.

$000 2016 2015

80 – 90 3 -90 – 105 2 1105 – 120 3 -120 – 135 - -135 – 150 3 2150 – 165 - 1165 – 180 - 2195 – 210 1 1225 – 240 - 1255 – 270 - -270 – 285 1 -285 – 300 1 -300 – 315 - 1360 – 375 1 -

15 9

Shell Group companies made contributions during the year to a defined benefit pension scheme of $0.2 million in relation to these 15 employees (2015: $0.2 million in relation to nine employees).

9. Taxation

The Foundation is a registered charity, and as such is entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried out in furtherance of the Foundation’s primary objectives, if these profits and surpluses are applied solely for charitable purposes.

10. Endowment 2016

$0002015

$000

Market value at 1 January 442,866 472,523Purchase of investments 131,757 68,636Sales/withdrawals (152,010) (80,921)Realised gains 9,585 11,268Unrealised (losses)/gains 9,132 (24,942)Movement of investment cash 1,330 (3,698)

Market value at 31 December 442,660 442,866

The year end value is analysed as:2016$000

2015$000

Bonds – Overseas 64,696 -Fixed income investments – UK 3,412 8,431Fixed income investments – overseas 31,566 103,131Equity investments – UK 22,583 23,697Equity investments – overseas 264,814 255,308Hedge funds – overseas 48,580 47,079Forward foreign currency contracts 1,335 1,195Other assets 1,042 696Investment cash 4,632 3,302Cash invested in institutional cash funds - 27

Market value at 31 December 442,660 442,866



During 2016, the cash invested in institutional cash funds that represented cash invested in Fidelity Institutional Cash Fund plc was transferred to Shell Foundation’s current account.

The investment policy of the Trustees aims to maintain the real value of both distributions and the endowment asset value. To achieve this, the endowment is invested in a diversified asset allocation of global equities, hedge funds and fixed income funds.

The foreign currency exposure of the investment portfolio is hedged by the fund managers through the use of forward foreign exchange contracts. The mandate is to hedge 100% of non-US Dollar denominated bonds and 100% of non-US Dollar hedge fund investments. At the year-end just under 35% of bonds and 0% of hedge fund investments were non-US Dollar.

The investment portfolio included a single US bond with the value of $23 million (5.2% of the total investment portfolio). No other individual asset within the investment portfolio had a value greater than 5% of the investment portfolio.

11. Social Investments

Programme Related Investments

Current

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Envirofit Inc ShareholdingEnvirofit is a social enterprise designing, producing, and selling efficient, durable and affordable safe cookstoves that create environmental, health, and social impacts for homes and institutions in developing nations. Following the dilution in the first half of 2016, by a $3 million FMO investment in Envirofit and the concurrent redemption of $1 million Shell Foundation shareholding; Shell Foundation holds 15.5% of the outstanding shares of Envirofit International Inc as at year end.

Fair value brought forward at 1 January 1,000 - 1,000 -Purchases - 1,000 - 1,000Sales (1,000) - (1,000) -

GroFin Africa Fund (GAF)GAF is engaged in acting as a collective investment scheme operating mainly in east, west and southern Africa with a focus on the start-up and growth of small to medium enterprises. The Investors are: AFDB, EIB, Shell Foundation FMO, CDC, Norfund, FISEA, IFC, GroFin. Total fund size $139 million.

Cost less impairment brought forward at 1 January 2,317 1,402 2,317 1,402Movement from non-current to current 1,918 2,317 1,918 2,317Purchases - - - -Sales (1,402) (1,402) (1,402) (1,402)

Redavia loan receivableRedavia provide turn-key re-deployable solar farms that reduce reliance on diesel generators and provide low-cost energy, with flexible rental agreements. The loan is repayable in full by 2027 or 4% of the original loan annually.

Cost less impairment brought forward at 1 January - - - -Movement from non-current to current 16 - 16 -Sales - - - -

Total Current Programme Related Investments 2,849 3,317 2,849 3,317



11. Social Investments (continued)Programme Related Investments

Non-Current

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Envirofit Inc. ShareholdingEnvirofit is a social enterprise designing, producing and selling efficient, durable, affordable and safe cookstoves that create environmental, health, and social impacts for homes and institutions in developing nations. Shell Foundation holds 15.5% of the outstanding shares of Envirofit International Inc. as at year end.

Fair value brought forward at 1 January 4,532 - 4,532 -Purchases - 4,531 - 4,531Sales - - - -

GroFin Africa FundGAF is engaged in acting as a collective investment scheme operating mainly in East, West and Southern Africa with a focus on the start-up and growth of small to medium enterprises. The Investors are: AFDB, EIB, Shell Foundation FMO, CDC, Norfund, FISEA, IFC, GroFin. Total fund size $139 million.

Cost less impairment brought forward at 1 January 7,707 10,024 7,707 10,024Movement from non-current to current (1,918) (2,317) (1,918) (2,317)Purchases - - - -Sales - - - -Impairment (2,734) - (2,734) -

GroFin Small and Growing Businesses Fund (SGB)The SGB fund is an impact investment fund for small and growing businesses in East, West and Southern Africa. Its objective is to deliver social and economic impact at scale as well as sustainable investment returns. The Investors are: Shell Foundation, KfW Development Bank, GroFin, the Dutch Good Growth Fund (DGGF), Norfund, Scholl Foundation, Calvert. Total fund size $150 million.

Cost less impairment brought forward at 1 January 4,800 - 4,800 -Purchases 4,450 4,800 4,450 4,800Sales - - - -

responsAbility Energy Access FundThe fund is dedicated to providing debt financing to fast-growing companies which promote access to decentralised modern energy solutions, primarily in Africa and Asia. Investors: Shell Foundation, a founding partner, is also a co-investor along with anchor investor IFC and other private investors including Skopos Impact Fund and The Adolf H. Lundin Charitable Foundation. Total fund size $34 million.

Cost less impairment brought forward at 1 January 2,000 - 2,000 -Purchases - 2,000 - 2,000Sales - - - -

Lightning Hybrids Inc. loan receivableLightning Hybrids provide hydraulic hybrid regenerative braking drive systems for fleet vehicles such as buses and delivery trucks. The loan is repayable between 2019 and 2020.

Cost less impairment brought forward at 1 January 1,500 - 1,500 -Purchases - 1,500 - 1,500Sales - - - -

Redavia loan receivableRedavia provide turn-key re-deployable solar farms that reduce reliance on diesel generators and provide low-cost energy, with flexible rental agreements in Africa and Asia. The loan is repayable in full by 2027.

Cost less impairment brought forward at 1 January 400 - 400 -Movement from non-current to current (16) (16)Purchases - 400 - 400Sales (16) - (16) -

SparkMeter loan receivableThe SparkMeter micro grid metering system enables utilities to implement pre-payment as well as real-time monitoring and control on micro grids and central grids alike. The low-cost system consists of four hardware components, a cloud-based operator interface, and a mobile money or cash-based pre-payment system in order to unlock energy services for the off-grid population. The meters’ low cost, makes their use for low-consumption customers economical and the integrated nature of the technology makes it simple to install and operate. The loan is repayable in full by December 2022.

Fair value brought forward at 1 January - - - -Purchases 375 - 375 -Sales - - - -

Factor(E) loan receivableFactor(E) identify disruptive, high risk technologies to solve critical energy bottlenecks in India and Kenya. They provide risk capital & engineering support – to test, de-risk and attract investment to scale promising solutions, since entrepreneurs working on new technologies often cannot find the technical and investor support they need. The loan is repayable in full by June 2026.

Cost less impairment brought forward at 1 January - - - -Purchases 2,500 - 2,500 -Sales - - - -Impairment - - - -



11. Social Investments (continued)Programme Related Investments

Non-Current (continued)

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Gajam Group Limited (Dharma Life) loan receivableOperating in India, Dharma Life builds and trains a network of rural entrepreneurs, makes social-impact products accessible in rural markets and conducts innovative campaigns to create market demand. The loan is repayable in full by December 2022.

Cost less impairment forward at 1 January - - - -Purchases 989 - 989 -Sales - - - -

Husk Power Systems Inc. loan receivableHusk is a leading off-grid utility, providing affordable, reliable and renewable power to rural communities. Operating in India, Tanzania and Kenya it designs, builds, owns & operates grid compatible plants, providing A/C power, which is suitable for all appliances. The loan is repayable in full by September 2026.

Cost less impairment brought forward at 1 January - - - -Purchases 1,300 - 1,300 -Sales - - - -

Persistent Energy Capital loan receivableOperating in underserved African countries, PEC identifies high potential, early-stage PAYG energy businesses, invests and scales them with critical knowledge, experience and networks in business, governance and financing. This is in order to address access to energy in smaller, or unproven African markets that existing market leaders have no plans to be in. The loan is repayable in full by December 2026.

Cost less impairment brought forward at 1 January - - - -Purchases 500 - 500 -Sales - - - -

Buen Manejo del Campo S.A. (Sistema Biobolsa) loan receivableSistema combine manufacturing, sales and service of high quality bio-digester systems with consumer financing to enable affordable biogas solutions for productive use. They create innovative distribution partnerships across Africa and India to reach low income smallholder farmers reducing their fuel/ fertiliser cost, enabling clean cooking/ heating and improving access to electricity. The loan is repayable in full by March 2027.

Cost less impairment brought forward at 1 January - - - -Purchases 500 - 500 -Sales - - - -

Nomou Iraq FundThe principal activities of the Company are to invest in small and growing businesses (SGBs) within Iraq to further employment in the country. The Company was established under a Cooperation Agreement with USAID. GroFin has been chosen as the key strategic partner to further the aims of the Company and manage the distribution of funds to carefully selected SGBs in Iraq. Shell Foundation has had successful relationship with GroFin in a number of ventures for many years.

Cost less impairment brought forward at 1 January - - - -Purchases 3,700 - - -Sales - - - -Impairment (1,256) - - -

Total Non-Current Programme Related Investments 29,313 20,938 26,869 20,938

Mixed Motive Investments Non-Current

Aavishkaar Ventures Management Services – interest bearing convertible debt agreementAVMS provides financial products and services in India and Kenya that are focused on people who are in low income communities. Their six areas of special focus have a direct and immediate impact on the lives and livelihoods of low-income consumers. These sectors are: Clean Energy, Agriculture and Rural Business, Financial Services, Water and Sanitation, Healthcare, Education and Vocational Training. Interest bearing convertible debt agreement; convertible into ordinary equity shares on or before 9th anniversary of funding (October 2025).

Cost less impairment brought forward at 1 January - - - -Purchases 10,000 - 10,000 -Sales - - - -Sales - - - -

Total Non-Current Investments 39,313 20,938 36,869 20,938

Total Current Investments 2,849 3,317 2,849 3,317

Cost carried forward as at 31 December 2016 42,162 24,255 39,718 24,255



12. Subsidiary and related undertakings

The related undertakings whose results or financial performance principally affect the figures shown in the consolidated financial statements are as follows:

NameCountry of Incorporation Nature of business Interest

SF Investment Management Limited United Kingdom Investment management 100% ordinary shares

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

SF Investment Management Limited shareholdingCommitment to invest with GroFin Nomou Iraq Fund: A unique integrated solution of patient risk capital ($ 0.1 million - $2 million) and end-to-end business support to start-up and growing businesses in Basra, Iraq. Investors: Shell Foundation and USAID.

Cost less impairment brought forward at 1 January - - 3,991 -Purchases - - - 4,000Impairment - - (1,276) (9)

Cost carried forward as at 31 December 2016 - - 2,715 3,991

13. Debtors

Note

Group2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Amounts falling due within one year are:Restricted donations non-government related

Shell Trading International Ltd - 7,000 - 7,000Restricted donations government related

Inter-American Development Bank 2 - 493 - 493Department of International Development 2 7,657 - 7,657 -United States Agency for International Development 2 1,610 - 1,610 -OPEC Fund for International Development 2 700 - 700 -

Unrestricted Convertible DebtAavishkaar Ventures Management Services 100 - 100 -

Amounts falling due after more than one year are:Restricted donations government related

Department of International Development 1,820 - 1,820 -United States Agency for International Development 300 - 300 -

Unrestricted debtorThe Shell Centenary Scholarship Fund 270 - 270 -

Total debtors 12,457 7,493 12,457 7,493

14. Cash at bank and on handGroup

2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Cash at Bank 18,820 18,031 18,522 14,031

Total cash at bank and on hand 18,820 18,031 18,522 14,031

For the purposes of the cash flow statement, cash includes bank balances, other than cash invested in institutional cash funds, which is classified as an investment.



15. Creditors: amounts falling due within one yearGroup

2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Grants Payable 18,121 15,929 18,121 15,929Trade Creditors – Shell International Limited 6,647 592 6,647 592Accruals 9 4,306 - 4,297

24,777 20,827 24,768 20,818

All programme support expenses, investment management costs and Foundation management expenses are initially incurred and paid through Shell International Limited. These expenses are then recharged at cost by invoice from Shell International Limited to the Foundation on a monthly basis. Shell Foundation accruals are booked as payable to Shell International Limited.

16. Creditors: amounts falling due after more than one year Group

2016$000

Group2015$000

Foundation2016$000

Foundation2015$000

Total grants payable 19,208 16,502 19,208 16,502Less amounts falling due within one year (note 15) (18,121) (15,929) (18,121) (15,929)

Grants payable falling due after more than one year 1,087 573 1,087 573

Accrual for employee benefit 399 185 399 185Payable to USAID for Nomou Iraq project 2,703 3,991 2,703 3,991

Total payables falling due after more than one year 4,189 4,749 4,189 4,749

Represented by:Grants payable in greater than one year but less than two years 1,087 573 1,087 573Accrual for employee benefit 399 185 399 185USAID payable in greater than five years 2,703 3,991 2,703 3,991

4,189 4,749 4,189 4,749



17. Funds

Group

BalanceBfwd$000

IncomingResources

$000

ResourcesExpended

$000Transfers

$000

InvestmentGain/(losses)

$000

BalanceCfwd$000

Endowment Funds 442,838 7,808 (348) (25,152) 17,514 442,660Unrestricted Funds 29,467 6,654 (20,493) 25,152 - 40,780Restricted Funds (5,236) 22,618 (13,689) - - 3,693

467,069 37,080 (34,530) - 17,514 487,133

Foundation

BalanceBfwd$000

IncomingResources

$000

ResourcesExpended

$000Transfers

$000

InvestmentGain/(losses)

$000

BalanceCfwd$000

Endowment Funds 442,838 7,808 (348) (25,152) 17,514 442,660Unrestricted Funds 29,467 6,654 (20,493) 25,152 - 40,780Restricted Funds (5,236) 22,613 (13,702) - - 3,675

467,069 37,075 (34,543) - 17,514 487,115

Transfers were made between the expendable endowment and unrestricted funds during the year to fund the Foundation’s annual activities.

18. Analysis of net assets between funds

Group Note




Total2016$000

Total2015$000

Fixed Assets

Endowment investment (at fair value) 10 - - 442,660 442,660 442,866Social investments (at costs less impairment) 11 33,194 6,119 - 39,313 20,938

33,194 6,119 442,660 481,973 463,804

Current Assets

Debtors:amounts falling due within one year 13 100 9,967 - 10,067 7,493amounts falling due after one year 13 270 2,120 - 2,390 -

370 12,087 - 12,457 7,493

Cash at bank and on hand 14 17,622 1,198 - 18,820 18,031Social investments (at cost less impairment) 11 2,849 - - 2,849 3,317Creditors: amounts falling due within one year 15 (12,233) (12,544) - (24,777) (20,827)

Net Current Assets 8,608 741 - 9,349 8,014

Total Assets less Current Liabilities 41,802 6,860 442,660 491,322 471,818

Creditors: amounts falling due after more than one year 16 (1,022) (3,167) - (4,189) (4,749)

Net Assets 40,780 3,693 442,660 487,133 467,069



18. Analysis of net assets between funds cont.

Foundation Note




Total2016$000

Total2015$000

Fixed AssetsEndowment investment (at fair value) 10 - - 442,660 442,660 442,866Social investments (at cost less impairment) 11 33,194 3,675 - 36,869 20,938Subsidiary undertakings 12 - 2,715 - 2,715 3,991

33,194 6,390 442,660 482,244 467,795

Current AssetsDebtors

amounts falling due within one year 13 100 9,967 - 10,067 7,493amounts falling due after one year 13 270 2,120 - 2,390 -

370 12,087 - 12,457 7,493

Cash at bank and on hand 14 17,622 900 - 18,522 14,031Social investments (at cost less impairment) 11 2,849 - - 2,849 3,317Creditors: amounts falling due within one year 15 (12,283) 12,535 - (24,768) (20,818)

Net Current Assets 8,608 452 - 9,060 4,023

Total Assets less Current Liabilities 41,802 6,842 442,660 491,304 471,818

Creditors: amounts falling due after more than one year 16 (1,022) (3,167) - (4,189) (4,749)

Net Assets 40,780 3,675 442,660 487,115 467,069

19. Reconciliation of movement in funds to net cash used in operating activities2016

Group$000

2016 Foundation

$000

2015

$000

Net movement in unrestricted and restricted funds 20,242 20,242 13,023Add back transfer from endowment fund (25,152) (25,152) (21,513)Add back impairment 3,989 3,989 -Increase in net debtors – unrestricted & restricted funds (5,082) (5,082) 4,877Increase in net creditors – unrestricted & restricted funds 3,165 3,167 (2,345)

Net cash used in operating activities (2,838) (2,836) (5,958)



20. Financial Instruments

The Group and the Foundation have the following financial instruments:

Group and Foundation Note2016$000

2015$000

Financial assets at fair value through the SOFA- Endowment 10 442,660 442,866

442,660 442,866

Financial assets that are debt instrument measured at amortised cost- Debtors 13 9,967 7,493

9,967 7,493

Financial assets that are debt instrument measured at cost less impairment- Programme related investment – responsibility Loan 11 2,000 2,000- Programme related investment – Lightning Hybrids Loan 11 1,500 1,500- Programme related investment – Redavia Loan 11 384 400- Programme related investment – SparkMeter Loan 11 375- Programme related investment – Factor(E) Loan 11 2,500- Programme related investment – Gajam Group Ltd (Dharma Life) Loan 11 989

- Programme related investment – Husk Power Systems Inc. Loan 11 1,300

- Programme related investment – Persistent Energy Capital Loan 11 500

- Programme related investment – Buen Manejo del Campo S.A. (Sistema Biobolsa) Loan 11 500

- Mixed motive investment – Aavishkaar Ventures Management Services convertible debt agreement 11 10,000

20,048 3,900

Financial assets that are equity instrument measured at cost less impairment- Programme related investment – GroFin Africa Fund 11 5,888 10,024- Programme related investment – GroFin SGB Fund 11 9,250 4,800- Programme related investment – Envirofit 11 4,532 5,531- Programme related investment – Nomou Iraq Fund 11 2,444

22,114 20,355

Financial liabilities at fair value through the SOFA - -

- -

Financial liabilities measured at amortised costs- Creditors and accruals 15,16 (28,966) (25,576)

(28,966) (25,576)

Other financial liabilities measured at fair value- Contingent liabilities 25 (3,500) (1,500)

(3,500) (1,500)



21. Derivative financial instruments

The Foundation holds an endowment which uses derivative financial instruments to hedge exposures. Although the derivative financial instruments entered into for hedging purposes are linked to the underlying transactions of the endowment, they do not meet the criteria for hedge accounting as the hedging relationships do not consist of hedging instruments and hedged items that meet certain criteria, and thus do not qualify for hedge accounting. They have been classified as non-hedging instruments in the below table.

Contractual NotionalAmount

$000

Fair value

Asset$000

Liability$000

2016Non-hedging instruments

- Foreign exchange contracts 72,560 2,031 (697)

Total 2,031 (697)Less: current portion (2,031) 697

Non-current portion - -

Non-hedging instruments- Foreign exchange swaps - - -

Total - -Less: current portion - -


2015 Non-hedging instruments

- Foreign exchange contracts 64,176 1,222 (28)

Total 1,222 (28)Less: current portion (1,222) 28


Non-hedging instruments- Foreign exchange swaps - - -

Total - -Less: current portion - -


22. Capital commitment

The Foundation had the following capital commitments as at 31 December 2016:GroFin SGB Fund $5.8 million (2015: $10.2 million) and Nomou Iraq Fund Nil (2015: $4 million).



23. Capital

The Foundation is a company limited by guarantee. The sole member has undertaken to contribute $1 to the assets of the Foundation to meet its liabilities if called on to do so.

24. Related party transactions

The sole member of the Foundation is The Shell Petroleum Company Limited (SPCo). The ultimate parent company of SPCo is Royal Dutch Shell plc. The Foundation’s investment manager is Shell Asset Management Company (SAMCo), which is also a subsidiary of Royal Dutch Shell plc. During the year the Foundation made payments of $231,506 (2015: $190,988), related tax accrued $44,026, and generated accrued investment management costs of $58,662 (2015: $52,709), related tax accrued $11,732, on normal business terms with SAMCo.

During the year the Foundation made payments of $1.9 million (2015: $1.5 million) and generated accrued costs of $7.0 million (2015: $4.5 million) on normal business terms with Shell International Limited.

Of the Foundation’s current or former Trustees listed on page 3, the following are or were directors or officers of certain Shell Group companies: Ms Sinead Lynch, Mr Maarten Wetselaar, Mr Andrew Brown, Mr Malcolm Brinded and Mr Ben van Beurden. The Shell Group has other charitable affiliates that are not formally related to the Foundation, such as The Shell Centenary Scholarship Fund in the UK and the Shell Oil Foundation in the USA.

Donations received included the following as disclosed in Note 2:

Entity Name2016$000

2015$000

Shell Trading International Ltd - 6,000Shell Energy Europe Limited 6,000 -

As part of Shell Foundation’s approach as an engaged donor, Shell Foundation staff members often participate in the governance of strategic partners to maintain strength and skills of the Board. None of the Shell Foundation employees who serve on the Boards of these partners receive any remuneration for these duties. Position of influence of key management personnel, Sam Parker – Shell Foundation Director, Judith Pollock – former Deputy Director, Pradeep Pursnani – Deputy Director, during the 2016 year were:

Shell Foundation Key Management Personnel

Organisation’s Name Position

Grant2016$000

Grant2015$000

Outstanding Liability

2016$000


2015$000 Notes

Sam Parker (Judith Pollock until 11/2016)

Stichting Smart Freight Centre

Board Member 1,100 1,300 - -

Pradeep Pursnani Gajam Group Limited Member of the Advisory Board

20 2,200 200 1,100

Pradeep Pursnani IntelleGrow Board Member - 1,000 400 700 Intellecap Advisory Services is a SF Grantee that belongs to the IntelleGrow Group of Companies.

Pradeep Pursnani BIX Fund Management BV

Board Member - 200 - 100

Pradeep Pursnani Husk Power Systems Pvt.

Board Member 1.6 800 400 200



24. Related party transactions (continued)


Organisation’s Name Position

Grant2016$000

Grant2015$000


2016$000


2015$000 Notes

Pradeep Pursnani Factor(E) Ventures Limited

Board Member 500 - - -

Pradeep Pursnani Factor(E) Ventures PBC

Board Member 1,400 - 100 -

Pradeep Pursnani Envirofit International Inc.

Board Member 400 - 300 -

Pradeep Pursnani responsAbility Energy Access Fund

Board Member - - - 350

Pradeep Pursnani SparkMeter Board Member 700 1,300 300 200

Pradeep Pursnani d.light Observer 1,700 - 1,200 -

Pradeep Pursnani Redavia Observer 1,700 1,100 500 -

Pradeep Pursnani GroFin Nomou (MENA)

Member of the Advisory Committee

- - - 830

Pradeep Pursnani GroFin Africa Fund, GroFin SGB Fund and GroFin Nomou (MENA)

Member of the Advisory Committees

300 100 300 100 GroFin Managers is a SF Grantee that belongs to the GroFin Group of Companies.


Organisation’s Name Position SF Involvement

Pradeep Pursnani Envirofit International Inc

Board Member Following the dilution in the first half of 2016, by a $3 million FMO investment in Envirofit and the concurrent redemption of $1 million SF shareholding; SF holds 15.5% of the outstanding shares of Envirofit International Inc as at year end. (2015: purchase of shareholder equity of $5.5 million)

Pradeep Pursnani responsAbility Energy Access Fund

Member of the Board of Directors

Investment of $2 million at the 2016 year-end (2015: $2 million)

Pradeep Pursnani GroFin SGB Fund Member of the Advisory Committees

Investment of $9.25 million in GroFin SGB Fund at the 2016 year-end (2015: $4.8 million)

Pradeep Pursnani GroFin Africa Fund Member of the Advisory Committees

Investment in GroFin Africa Fund of $5.9 million at the 2016 year-end (2015: $10 million)

Pradeep Pursnani Aavishkaar Venture Management Services Private Limited, part of The Aavishkaar-Intellecap Group

Board member Convertible Debt Agreement of $10 million (2015: nil)

Pradeep Pursnani BIX Fund Management BV

Board Member Six year financial guarantee of $2 million to Calvert Social Investment Foundation Inc. for pre-funding of the BIX carbon fund via Cardecho (2015: nil)

Pradeep Pursnani Envirofit International Inc.

Board Member In October 2012, Shell Foundation offered a seven year financial guarantee of $1.5 million to Calvert Social Investment Foundation Inc. to cover a $3 million loan facility to Envirofit International Inc. As of December 2015, Envirofit International Inc. had drawn down $3 million of this loan.

Pradeep Pursnani Husk Power Systems Board Member Loan Receivable $1.3 million (2015: nil)Pradeep Pursnani Factor(E) Ventures PBC Board Member Loan Receivable $2.5 million (2015: nil)



24. Related party transactions (continued)Shell Foundation Key Management Personnel

Organisation’s Name Position SF Involvement

Pradeep Pursnani Redavia Observer Loan Receivable $0.4 million (2015: $0.4 million)

Pradeep Pursnani Gajam Group Limited Member of the Advisory Board

Loan Receivable $1.0 million (2015: nil)

Pradeep Pursnani SparkMeter Board Member Loan Receivable $0.4 million (2015: nil)

25. Guarantees and contingent liabilitiesAt any time the Foundation may be in discussion with potential grantees or may even have made formal offers of grants to grantees, which are pending their acceptance.

In October 2012, Shell Foundation offered a seven year financial guarantee of $1.5 million to Calvert Social Investment Foundation Inc. to cover a $3 million loan facility to Envirofit International Inc. As of December 2015, Envirofit International Inc. had drawn down $3 million of this loan. In Q3 2016, Shell Foundation committed to a six year financial guarantee of $2 million to Calvert Social Investment Foundation Inc. The guarantee is capped at $2 million in aggregate and is in two parts – firstly a $2 million guarantee to Calvert for pre-funding of the BIX carbon fund via Cardecho, and secondly $2 million to Cardecho guaranteeing carbon credit instalments from Envirofit, which in part will be used to repay the Calvert pre-finance loan.

26. Post balance date events

The Foundation have not engaged in post balance date transactions outside of normal business transactions.

report of the trustees and financial statements 2016 · ernst & young llp mr malcolm brinded,...

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